Owner Of Mystic Pizza Pleads Guilty To Tax Evasion

GROTON — The owner of Mystic Pizza, the restaurant made famous by the 1988 movie co-starring Julia Roberts, pleaded guilty Tuesday at federal court to tax evasion and financial structuring offenses.

Prosecutors said that John Zelepos, 48, of North Stonington, sought to cheat the government out of more than $565,000 in tax revenue.

Zelepos, the owner of the restaurant in the Mystic section of Groton, could face up to 15 years in prison and a $500,000 fine for the offenses. In addition, he has agreed to make restitution of $234,407 for incomplete tax filings dating from 2006 to 2010 and to forfeit an additional $522,658 that he deposited into his personal accounts in a manner designed to avoid financial reporting from the banks, according to a news release from U.S. Attorney Deirdre M. Daly.

Zelepos diverted $567,435 in income derived from Mystic Pizza into a series of personal bank accounts belonging to him and other members of his family from 2006 to 2010, including accounts belonging to his wife and three minor children, Daly said.

He intentionally structured the transactions in amounts from $3,000 to $9,998 to prevent the banks from filing currency transaction reports, Daly said. Under federal law, a financial institution is required to report any transactions that exceed $10,000.

An investigation found that workers were paid less than the minimum...

Mystic Pizza, the restaurant made famous by the 1988 movie co-starring Julia Roberts, has been ordered to pay 110 employees a total of $105,000 in compensation for labor violations, the state Department of Labor said Thursday.

An investigation found that workers were paid less than the minimum...

(MATTHEW STURDEVANT)

Daly said that Zelepos also kept two "no-show employees" on the books of Mystic Pizza to deduct wages paid to the employees as business expenses.

In September 2014, Mystic Pizza was also ordered to pay 110 employees a total of $105,000 in compensation for labor violations after an investigation found that workers were paid less than the minimum wage and did not receive required overtime pay.

Investigators found that Zelepos paid cooks, dishwasher and hosts as little as $5.69 an hour between May 2012 and June 2014, and that some employees worked as many as 93 hours a week and were not paid the required overtime.

Zelepos was released pending his sentencing, which is scheduled for June 23.

On its website, Mystic Pizza says that screenwriter Amy Jones was "summering in the area" when the restaurant came to her attention, leading her to choose it as the setting for a story about three waitresses and their lives in service to "A Slice of Heaven."